Executive financial background, external audit quality and shadow banking in non-financial firms

Xiaodong Huang and Lingling Luo

Finance Research Letters, 2024, vol. 64, issue C

Abstract: The absence of formal financial services in the face of the actual economy's transition from old to new sources of energy and development modes has led to the emergence of a widespread shadow banking sector. Based on the high-order ladder theory, this paper examines the influence of executives' financial background on non-financial firms' shadow banking. The finding reveals a positive impact of executive financial backgrounds on non-financial firms' shadow banking, mainly driven by the executives' non-banking financial experiences, primarily contributing to the shadow credit chain model. Additionally, high-quality external audits discourage management from engaging in blind shadow banking activities.

Keywords: Executive financial background; External audit quality; Shadow banking (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:64:y:2024:i:c:s1544612324004276

DOI: 10.1016/j.frl.2024.105397

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